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The East African : Aug 16th 2015
46 The EastAfrican BUSINESS AUGUST 15-21,2015 E N T R E P R E N E U R S O F N OT E : B R I AN C H E SK Y As entrepreneurs, it really helps us when we see other people do it The founders of AirBnB turned their airbed into a multibillion dollar business. One of the founders spoke to WALLACE KANTAI about disruption, fear and the importance of location in entrepreneurship. How did you trust people so much, and get other people to trust other people? We started by solving our Hotels are not our worst enemy... they’re doing better than they ever have, and yet we’re also doing really well. own problem. At some point, while living in San Francisco with my roommate, we couldn’t pay rent. An international design conference came to town, and all the hotels in San Francisco were sold out. We had an idea: What if we could create a bed-and-breakfast for the design conference? My roommate Joe had three airbeds. We pulled them out of the closet, inflated them, and called it the Air Bed and Breakfast. We hosted three people from the design conference, and as we were waving them goodbye, we realised: People love homes, which is why they live in them. So why couldn’t they just live in homes when they travelled? So we built this platform, and today, we have 1.5 million homes in 34,000 cities in 190 countries all over the world, including 1,500 here in Kenya. The reason it worked — the core invention — is that you do get to virtually meet them. There are no strangers in AirBnB. Everyone on AirBnB has an identity. After you stay with me, you leave me a review, and I leave you a review. We have 24/7 customer support, so if you ever have a problem you can call us. We exchange all money — in fact we hold all the money to make sure nothing goes wrong — and we realised that that was the thing that was stopping this idea from spreading. If we could take the stranger out of it, and you could feel that you virtually meet people and trust them, and know who they are, then why wouldn’t you stay in a home? You could save money and have all these great experiences. There is a notion that is abroad nowadays — the notion of disruption. You seem to be disrupting the entire hospitality industry. Hotels must be your worst enemy. Actually, they’re not our worst enemy. The funny thing is that while we’re growing really fast, hotels have record profits. They’re doing better than they ever have, and yet we’re also doing really well. I think the hospitality industry is a huge one. The tourism industry is worth up to $7 trillion — the same as the oil industry. There is plenty of room for many big companies to exist in this market. In fact, one of the big- gest industries we’re disrupting is people staying with friends and family — people who used to stay with friends and family now stay in AirBnBs. All of us are in the business of change — in the business of technology, and we need to continue to change and evolve. As long as we all do and we have really happy customers, we’ll do alright. If we don’t, it doesn’t matter whether there’s an AirBnB, there’ll always be someone looking to disrupt. The whole notion of being at the intersection of need and supply is becoming huge: You’re one of the biggest, but there are also companies in the transport industry and the like. Why has it all suddenly come together at the same time? These are marketplace busi- nesses, meaning that you have two different people exchanging goods. You have someone who has a home and someone who needs a home, or someone who has a ride and someone who needs a ride. All these marketplaces needed a few things: You needed identities – people with a profile online so you could know who I am and I could know who you are. You needed people to feel comfortable pay- ing online. You needed to have a reputation, and you needed high Internet adoption. All these things have happened in the past 10-15 years, and that allowed all these different ideas to happen. These communities are marketplaces, which are like the old villages and markets of hundreds of years ago. Suddenly that became virtual, and the world became a whole lot smaller. Speaking of you personally, at what point did you move from trepidation and the fear that it would never work, to wanting to conquer the world, and say I only want to stop when I get to Pluto. [Laughing] Well, Pluto is pretty far away but we’re working on one day getting to the moon. I think I was really inspired when I moved to San Francisco, and I met other entrepreneurs. I never thought growing up that I could be an entrepreneur. My parents were social workers, and all they wanted me to do was get a job, not create jobs. I didn’t know that was an option available to me, until I moved to San Francisco and met all these entrepreneurs. I guess I thought that if they could do it, why couldn’t I? I was very much inspired to start a company with my roommate. The moment I thought this would work was actually that very first weekend. We had three people come and stay with us, and they had amazing experiences. One of them ended up moving to San Francisco. Another one ended up inviting me to their wedding, and I made enough money to pay rent. At that moment, I realised that we’re ordinary guys, but there are a lot of other ordinary people like us who have space and would like to make extra money. And for the next 18 months to two years, it was really really hard. But we never quit, and some people ask why we didn’t. I say that I thought BIO AGE: 34 POSITION: Entrepreneur and co-founder and CEO of Airbnb, a hospitality exchange service. EDUCATION: Bachelor of Fine Arts in Industrial Design. Rhode Island School of Design OTHERS: Presidential ambassador for global entrepreneurship HOW AIRBNB WORKS: Airbnb connects hosts and travellers and enables transactions without owning any rooms itself. Unlike traditional hotels, Airbnb scales up not by scaling up inventory but by increasing the hosts and travellers and matching them with each other. Users of the Airbnb site must register and create a personal online profile before using the site. Every property is associated with a host whose profile includes recommendations by other users, reviews by previous guests, as well as a response rating and private messaging system. Hosts prodide personal information and display listing details including price, amenities, house rules, imagery, and detailed information about their neighborhood. Source: Internet back to that first weekend, when I realised that if people could experience what I experienced then, that this would be an idea that would spread around the world. I did think it would spread around the world, I just didn’t think it would be this many people. How important is the sense of place when it comes to inspiration and innovation? You keep speaking about San Francisco. We’re now starting to see a lot happening here in Nairobi. How important is the location of where you’re actually doing stuff? The thing that’s important is the sense of community — a sense of feeling like you have support. Entrepreneurs are uniquely talented and capable without any resources – without a manual, without a playbook, and maybe without any money, but they’ll find a way to make ideas work. But the thing that people don’t talk about is that these people had mentors or other entrepreneurs they could talk to. People helped them along the way, or people they could just draw inspiration from. As entrepreneurs, it really helps us to see other people do it. A lot of the big barriers to starting a company, or growing one, are in our heads — fear. So if you could see someone else do it, it makes it so much more accessible to feel like I could do that too. So I think having a community is important. It doesn’t have to be in California, or even in the US. What it really needs is other entrepreneurs within arm’s reach, which could be down the street or even online. It’s not unique to entrepreneurs. Artists live in communities together, and so do musicians. A sense of community is what you need to have a great ecosystem.
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